U.S. Home Prices Reach Record Highs in June Amid Signs of Slower Growth

Photo bygettyimages

As the U.S. housing market reaches unprecedented heights, new data reveals a potential shift in the winds. The latest S&P CoreLogic Case-Shiller Index, released on Tuesday, indicates that while home prices have hit a record high, the rate of growth is beginning to slow, hinting at a possible turning point in the market.

In June, national home prices surged by 5.4% compared to the previous year, setting an all-time high. However, this growth rate has decelerated from the 5.9% increase reported in May. Bright MLS chief economist Lisa Sturtevant notes that despite this slowdown, the current rate of appreciation is still noteworthy. “This is the lowest rate of home price appreciation since November 2023, but it is still remarkable given the fact that home prices are at record highs and, in June, mortgage rates were still around 7%,” she says.

The upward pressure on home prices has led to an increasingly unaffordable housing market, with first-time and moderate-income buyers being particularly affected. The Case-Shiller indices for the 10- and 20-largest U.S. cities also reached new highs in June, traditionally the peak season for the housing market. The 10-city index grew by 7.4% year-over-year, down from 7.8% in May, while the 20-city index rose by 6.5%, a slight dip from the 6.9% gain in the previous month.

Realtor.com® chief economist Danielle Hale expects this trend of slowing growth to continue. Despite the limited inventory—homes for sale are down 30% compared to 2017-2019 levels—home sales have remained low, which may further temper price increases.

As home prices take center stage ahead of the upcoming presidential election, affordability is becoming a pivotal issue. Vice President Kamala Harris, the Democratic nominee, has proposed policies to address the housing crisis, including $25,000 in down-payment assistance for first-time homebuyers. Meanwhile, Republican nominee Donald Trump has criticized the plan but hinted at considering his form of homebuyer assistance.

Brian D. Luke, head of commodities, real, and digital assets at S&P Dow Jones Indices, highlights the political and economic implications of rising home prices. “Home prices and inflation continue to factor into the political agenda coming into the election season,” Luke says. He notes that the Case-Shiller Index has recently outpaced overall inflation by 2.8 percentage points, exceeding the 50-year average.

Interestingly, the data shows that home prices are growing fastest in the entry-level segment, with the lowest price tiers in 75% of markets rising more quickly than the overall market. For example, the lower tier of the Atlanta market has risen 18% faster than middle- and higher-tier homes, reflecting the intense competition for affordable housing.

At The Trailer Empire, we strive to deliver insights that challenge conventional thinking and inspire action. As we witness these changes in the housing market, our focus remains on exploring innovative solutions to address the affordability crisis and ensure that everyone has a fair chance at homeownership.